Mortgage rates fell back to record lows again, as many expected following the Fed's announcement of a new bond purchase plan, which sent yields on mortgage backed securities lower.
The 30-year rate fell to 3.49%, matching its all-time low, and the 15-year fixed rate hit 2.77%, an all-time low, according to mortgage giant Freddie Mac.
Record low mortgage rates "should aid in the ongoing housing recovery," said Frank Nothaft, vice president and chief economist, Freddie Mac.
Help for the Recovery?
Are they doing that? It depends on the week -- and last week, not so much. The Mortgage Bankers Association reported earlier in the week that the market composite index, a measure of mortgage loan activity, fell 0.2% last week on a seasonally adjusted basis. The refinance share of the index increased 1%, and the seasonally adjusted purchase index fell 4%.
The week prior, the seasonally adjusted purchase and refinance indices increased 8% and 12%, respectively.
CNBC's Diana Olick points out that nearly a third of the homes sold in August went to buyers using all cash despite low rates.
As rates have slipped, not all buyers who would require a mortgage have been able to take advantage. "If most of the financially qualified buyers could obtain financing, home sales would be about 10 to 15 percent stronger, and the related economic activity would create several hundred thousand jobs over the period of a year," said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami, in a release.
Data earlier this week showed homebuilder confidence hit a six year high, existing home sales increased to a 2-year high and new housing starts also increased in August, leading to a lot more "housing comeback" talk. For instance:
"The housing market is steadily recovering with consistent increases in both home sales and median prices," said Lawrence Yun, NAR chief economist. "More buyers are taking advantage of excellent housing affordability conditions."
Home inventory in much of the nation is "broadly balanced, favoring neither sellers nor buyers," said Yun. But two exceptions, the West and Florida markets, are experiencing inventory shortages, which are "placing [upward] pressure on prices."
One company ready to take advantage of a housing comeback, online real estate listings company Trulia (TRLA), saw shares surge in its IPO on Wednesday.
Are you seeing a recovery in your area? Tell us what you're seeing in the comment section below.